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General Landlording & Rental Properties

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Adam Juodis
  • Plainfield, IL
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139
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Negative Cash Flow

Adam Juodis
  • Plainfield, IL
Posted Mar 7 2016, 20:41

Hey guys, I'm a super noob( I literally got into this 2 days ago, but I've spent all my free time doing research). So I'm gonna pose my question through this example:

Say I buy a 100k property with 20k down. I find a tenant to occupy my property, but due to certain circumstances the amount I can rent for does not exceed mortgage and other expenses. Let's say my cash flow after cole ting rent and paying fees is -$75 per month. 

Even though I'm losing $75 per month on average, eventually, the tenant will pay off my property(10yrs?), and then my property will most likely, after appreciation, be > $100k. Even if it stayed around buying cost, I now have a paid off house that I can continue to rent mortgage free, or sell.

I guess what I am tying to get across is that real estate is a ssuper solid investment that is low risk, even if you are receiving cash flow. Sure, investors desire positive cash flow, but even if you have to pay a bit out of pocket each month, in the long run you still have an asset that is valued much more than you put in to it.

Please scrutinize my thoughts. Am I thinking right about this? Any advice would be greatly accepted. Thanks!

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